Limited Tax Deductions May Make Keeping Home Costlier

The elimination of the alimony tax deduction has rightfully received the most attention amongst the recent changes to the federal tax laws. Not being able to deduct your spousal maintenance payments from your federal taxes is changing how divorcees negotiate their maintenance. However, changes to tax deductions related to real estate could affect whether you want to keep a home or other real property after a divorce. People in high-asset divorces may have fewer tax deductions available to them. Tax Deductions One of the goals of the federal tax reform law passed in 2017 was to simplify the tax code. The standard deduction for a single filer increased from $6,000 to $12,000, but many other deductions were reduced or eliminated, including: Capping deductions for state and local income and property taxes at $5,000 when filing as a single person; Eliminating deductions for home equity loan interest unless the loan was used to pay for improvements towards a primary or secondary…

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